Quiero saber acerca de...

Federal Register / Vol. 86, No. 155 / Monday, August 16, 2021 / Notices
lotter on DSK11XQN23PROD with NOTICES1

identified issues and restore compliance with the law. FINRAs review and evaluation of corrective action undertaken by the firms is performed on a case-by-case basis, depending on the severity of the deficiency and the risks to be addressed. While minor issues may be addressed through correspondence, material issues are reviewed and evaluated through interviews or desk reviews of the appropriate material. FINMA can also appoint an audit mandatary to confirm that corrective action has been taken.
For more significant issues, FINMA
supervisory staff can refer the matter to FINMA enforcement staff.
C. Enforcement Authority in Switzerland As the financial market supervisory authority, FINMA is empowered to enforce all financial law requirements relevant to the Swiss Application.
Informal investigations may be launched whenever FINMA receives information about potential regulatory irregularities or violations of law.
Sources of information include, among others, referrals from FINMAs supervisory staff, reports by other domestic or foreign authorities, or complaints from investors and clients.
Absent a legal obligation to disclose, FINMA treats complaints confidentially.
However, there are no incentives provided for whistleblowers, and they receive no specific statutory protection.
At the conclusion of an informal investigation, a determination is made whether the initial indications of violations have been confirmed and are sufficiently important, and if other relevant factors support opening a formal investigation. If a formal investigation is launched, the Administrative Procedure Act APA
is implicated and provides for certain rights and obligations of the involved parties.
FINMA has a broad range of investigative tools at its disposal, and is empowered with unrestricted access to certain books, records and recordings. In particular, Article 29 of FINMASA
stipulates that supervised persons and certain associates including their auditors and audit firms must provide FINMA with all information and documents FINMA requires to carry out its tasks. In addition, other provisions of FINMASA and the APA empower FINMA to compel witnesses, subject to certain statutory prerequisites, and hire experts to assist in conducting investigations. FINMA is also permitted to inspect documents and premises, and may investigate trading records from securities dealers and trade reports from
VerDate Sep<11>2014

17:21 Aug 13, 2021

Jkt 253001

trade venues and repositories. In general however, FINMA does not have jurisdiction over third parties and cannot obtain electronic communications held by third parties absent a contractual obligation to do so between the Covered Firm and the third party provider. As needed to fulfill its supervisory duties, FINMA may seek to obtain the information from public prosecutors who are authorized to obtain electronic communications.
After evidence has been gathered, it is summarized in a statement of facts regarding which the parties are permitted to comment. Ultimately, the matter is concluded with an order by FINMA. The span of time from the commencement of an informal investigation through the issuance of an order varies. As an example, FINMA
noted that the average length for 2019
was 14.4 months. FINMASA provides a statute of limitations of seven years for confiscation and the criminal prosecution of minor offenses; there is no general statute of limitations applicable to the rules related to the application for substituted compliance.
FINMA may order a variety of sanctions to enforce the law. The primary goal of Swiss financial market supervision relevant to the application is to maintain and, if necessary, restore compliance with the law by Covered Entities. In that regard, FINMA is not empowered to issue penalties. FINMA
does have authority to: Issue declaratory rulings, order substitution of performance by FINMA, publish supervisory rulings, impose cease-anddesist orders, require disgorgement of illegal profits, issue activity bans against individuals, impose industry bans, order liquidation or bankruptcy procedures, or revoke the license of a Covered Firm, among other sanctions.
FINMA does not return confiscated illgotten gains to harmed investors;
however, it takes into account remedial payments to investors made by the Covered Firm when establishing the amount to be confiscated. Additionally, FINMA has the right and obligation to refer conduct to prosecuting authorities if it suspects a criminal act by a Covered Firm. For example, insider trading and price manipulation fall within the remit of the public prosecutor. Swiss public prosecutors are empowered to take coercive measures, such as an asset freeze, and seek imposition of fines and other criminal law sanctions from competent criminal courts. FINMA is not empowered to take coercive measures.
FINMA annually publishes its enforcement results in the aggregate. As a general principle, it does not publish
PO 00000

Frm 00084

Fmt 4703

Sfmt 4703

45785

individual proceedings unless necessary i for the protection of the market participants or the supervised persons and entities, ii to correct false or misleading information, or iii to safeguard the reputation of the Swiss financial market. Article 34 of FINMASA permits FINMA to publish the supervisory ruling in an individual matter in the case of a serious violation of supervisory law. FINMA also maintains and publishes on its website a warning list of companies and individuals who may be carrying out unauthorized services and are not supervised by FINMA.
IX. Request for Comment A. General Aspects of the Comparability Assessments and Proposed Order The Commission requests comment regarding the preliminary views and proposed Order in connection with each of the general regulatory outcome categories addressed above.
Commenters particularly are invited to address, among other issues, whether the relevant Swiss provisions generally are sufficient to produce regulatory outcomes that are comparable to the outcomes associated with requirements under the Exchange Act, and whether the conditions and limitations of the proposed Order would adequately address potential gaps in the relevant regulatory outcomes or would otherwise result in any implementation or other practical issues. The Commission also requests comment upon whether there are additional conditions that should be added to those in the proposed Order to produce comparable regulatory outcomes.
Further, the Commission requests comment regarding whether the proposed conditions and limitations guard against comparability gaps arising from the cross-border application of Swiss requirements including when SBSDs conduct security-based swap business through branches located in the United States or in third countries.
With respect to the proposed conditions and limitations, commenters also are invited to address any differences between Swiss regulatory requirements and frameworks and either the German, French or UK requirements and frameworks that formed the basis for the Commissions conditional and proposed conditional grants of substituted compliance in those countries.112 Would the responses to 112 See generally German Substituted Compliance Order, 85 FR 85686; French Substituted Compliance Order, 86 FR 41612; UK Substituted Compliance Order, 86 FR 43318. See also German
E:FRFM16AUN1.SGM

Continued
16AUN1